Yearly Archives: 2012

Links 5/17/12

Michael Crimmins: Why the Cops Should be Knocking on Jamie Dimon’s Door Soon

By Michael Crimmins, who has worked on risk management and Sarbanes Oxley compliance for major banks

The scandal surrounding JP Morgan’s losses in its Chief Investment Office is not going away, and for good reason. Its trading book continues to lose money at an astounding rate. The most recent report estimates that the losses have increased by at least 50% more than the bank’s original loss estimates. The total damage is anyone’s guess at this point.

This fiasco is beginning to look a lot like accounting control fraud.

Mirabile Dictu! The SEC Finally Investigates Magnetar

More than four years after Serena Ng and Carrick Mollencamp of the Wall Street Journal first took notice of the highly destructive ways of the Chicago hedge fund Magnetar, which created a series of toxic CDOs, the SEC finally appears to be taking a serious look at some of their deals.

Abigail Field: Jamie Dimon’s Hedge Fund

By Abigail Caplovitz Field, a freelance writer and attorney. Cross posted from Reality Check

Jamie Dimon, John Stumpf, and to a lesser extent, Vikram Pandit and Bryan Moynihan, are running massive hedge funds. They’re placing enormous, incredibly risky bets.

So Much for Schneiderman Being Tough on Wall Street

As regular readers no doubt recall, Eric Schneiderman abandoned the dissident state attorney general effort to get a better mortgage settlement, assuring the Administration a win on this sellout to the banks. The bright shiny prize Schneiderman got in return for his betrayal was serving as one of five co-chairmen on a Federal mortgage task force, which appears to have gotten close to nada in resources beyond the staff in various Federal agencies who were already working on mortgage investigations. And given that were are now close to a full five years past the origination of toxic subprime deals, those existing investigations don’t exactly look to have been pursued with much in the way of vigor.

Links 5/16/12

Mark Ames: Failing Up With Citigroup’s Dick Parsons

Last month, shareholders finally rebelled against Citigroup, the worst of the Too Big To Fail bailout disasters, by filing a lawsuit against outgoing chairman Dick Parsons and handful of executives for stuffing their pockets while running the bank into the ground.

Anyone familiar with Dick Parsons’ past could have told you his term as Citigroup’s chairman would end like this: Shareholder lawsuits, executive pay scandals, and corporate failure on a colossal scale.

UNCTAD as the Battleground for Role of the State, Trade Policy

We’ve featured past Real News Network segments on the United Nations Conference on Trade and Development. UNCTAD has increasingly become a forum for struggles between advanced economies and developing economies over what the rules of the road should be in trade. UNCTAD was early to call the benefits of financialization into question, and has also been taking issue with the comparatively small take countries in the “south” get from extended supply chain production. This, needless to say, is a vision that is a direct challenge to how multinational like to conduct their affairs, so it should be no surprise that the big, rich countries are trying to bring UNCTAD to heel.

“What Scares Me Isn’t $2 Billion Loss JP Morgan Made, What Scares Me is the Record $19 Billion in Profits”

Even with all the focus on JP Morgan’s loss bomb in the past few days, some critical elements of the story have not gotten the scrutiny they deserve, and Amar Bhide fills those gaps.

Links 5/15/12

Tom Ferguson: Financial Regulation? Don’t Get Your Hopes Up

It has come to our attention that an article by Tom Ferguson, the political scientist who is generally recognized as the expert on the role of money in American politics, had an article posted on TPM’s website on April 17, 2008, which appears to have been removed from the site.

Satyajit Das: Topiary Lessons – JP Morgan’s US $2 Billion Loss

By Satyajit Das, derivatives expert and the author of Extreme Money: The Masters of the Universe and the Cult of Risk Traders, Guns & Money: Knowns and Unknowns in the Dazzling World of Derivatives – Revised Edition (2006 and 2010). Jointly posted with Roubini Global Economics

Having benefitted from risk management failures of others such as investment bank Bear Stearns and hedge fund Amaranth, JP Morgan (“JPM”) appears to have made an “egregious” and “self inflicted” hedging error. The bank would have done well to reflect on John Donne’s meditation: “send not to know for whom the bell tolls it tolls for thee”.

Europe’s Black Cygnets Grow

By Delusional Economics, who is horrified at the state of economic commentary in Australia and is determined to cleanse the daily flow of vested interests propaganda to produce a balanced counterpoint. Cross posted from http://www.macrobusiness.com.au/2012/04/europes-lunatics-rise/“>MacroBusiness.

And so the black cygnets scuttle from the shadows again.

Over the weekend, Angela Merkel’s Christian Democrats suffered an 8.3% swing in North Rhine-Westphalia as the Social democrats (SDP) and the Greens garnered a majority. Although this is only a state election, called after the previous SDP led minority government was unable to get approval for its budget, North Rhine-Westphalia is the country’s most popular state and seen the bellwether for national government. Of note is the fact that the SDP-Greens coalition governed Germany under Chancellor Gerhard Schröder from 1998 to 2005. Although this is as much about state politics and personalities, especially the SDP leader Hannelore Kraft, the flow-on effects at a national level from such a large turn around are very obvious: